ERISA-Mass. High Court Rules That ERISA Preempts A Claim Based On Unjust Enrichment

In Hitachi High Technologies America, Inc. v. Bowler, SJC-10386 (Supreme Judicial Court of Massachusetts 2009), the Court faced the question of whether ERISA preempts a State law action brought by a retirement plan fiduciary to recover money mistakenly paid to a plan participant. In this case, the plaintiff, Hitachi High Technologies America, Inc. (Hitachi), filed an action for unjust enrichment in the Mass. Superior Court against its former employee, the defendant Kevin Bowler, for his alleged failure to reimburse $29,315.75, with interest, in retirement benefits that Hitachi had overpaid to Bowler due to an accounting error. The lower court dismissed the case on the grounds that it lacked subject matter jurisdiction.

In analyzing the case, the Court noted that ERISA preemption is very broad. Under the statute (in 29 U.S.C. § 1144(a)), ERISA supersedes any and all State laws insofar as they may now or hereafter relate to any employee benefit plan. The United States Supreme Court has said that a law “relates to” an employee benefit plan if it has a connection with or reference to the plan, but has acknowledged that some state law may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law “relates to” the plan. The question, then, in the instant case, is whether the plaintiff’s claim for unjust enrichment relates to the retirement plan from which in the benefits in question were paid. The Court further noted that the basic intention of the preemption clause is to promote a nationally uniform administration of employee benefit plans, and this intention is difficult to achieve if a plan is subject to the separate requirements of each State. To allow a State law claim of unjust enrichment would present a threat of conflicting and inconsistent regulation that would frustrate the basic intention of ERISA. As such, the Court concluded that Hitachi’s action is preempted by ERISA.

The Court noted a second reason for concluding that Hitachi’s claim is preempted by ERISA. In enacting ERISA, Congress intended to provide a comprehensive remedial scheme that would serve as the exclusive enforcement mechanism for ERISA disputes. This scheme provides strong evidence that Congress did not intend to authorize the remedies that it simply did not incorporate in the statute. A remedy based on a claim of unjust enrichment-as opposed to certain claims for restitution- is not one of the remedies included in the statute.

Having concluded that ERISA preempts Hitachi’s claims for two reasons, the Court affirmed the lower court’s dismissal of the case.

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